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The Biden administration’s student debt-relief plan will cost about $30 billion a year over the next 10 years, according to an estimate from the U.S. Department of Education.
The estimate, released late Thursday, comes after the Congressional Budget Office, Congress’s nonpartisan research arm, said last week that the one-time relief would cost the federal government $400 billion over 30 years.
The Biden administration is planning to forgive up to $20,000 in federal student loans for eligible Americans. About 43 million Americans were originally expected to benefit from the relief, but the department has since cut out privately held federal student loans from the plan.
According to the department, the government will see $305 billion in reduced cash flows over the next decade. Over a more than 30-year period, the cost is estimated to be $379 billion in today’s dollars. Estimates are based on “highly uncertain assumptions,” according to the release.
The department is expecting about 81 percent of eligible borrowers to take advantage of the debt relief, based on participation in past relief programs.
